Are home businesses covered under condo insurance?
Standard condo insurance offers very limited, if any, coverage for home-based businesses in Colorado and Utah. Most business equipment and business-related liability are not included unless you add specialized coverage.
Your trusted Colorado and Utah insurance advisor, providing clear guidance for your unique coverage needs.
Complete Guide to Home Business Coverage Under Condo Insurance
Why This Question Matters for Colorado and Utah Residents
Running a business from your condo or townhome is increasingly common across Colorado and Utah—especially with remote work and entrepreneurship on the rise. But insurance for these setups can be complicated by HOA rules, master policies, and state-specific coverage gaps.
- Rising Home-Based Businesses: Nearly 1 in 5 Front Range residents operates some form of business from home, increasing liability risk and equipment value.
- HO6 Policy Gaps: Most standard condo (HO6) policies in Colorado and Utah exclude or strictly limit business property and almost always exclude business liability. State regulation requires “walls-in” coverage but not business use protection.
- Local Risks & Claims: With water damage accounting for 33% of condo claims regionally—and 28% due to hail—business equipment losses are especially underreported and underinsured. The average uncovered claim for business property exceeds $5,400.
What Most People Get Wrong
A common misconception is that a home business is automatically protected under your personal condo/townhome insurance. In reality, most policies limit business property coverage to $2,500 (often less), and business liability (for injuries to clients or service deliveries) is typically excluded without special endorsements.
Many condo owners also assume the HOA master policy steps in, but HOA insurance only covers common areas and external structure—it never protects business losses or liability inside your unit.
The Complete Picture
If you’re running a business—whether as a consultant, therapist, remote tech worker, or creative entrepreneur—review your policy carefully. While your condo policy may offer minimal protection for a computer or basic office equipment (often capped at $2,500), anything above this limit—including inventory, tools, or specialized electronics—is not covered unless you add a business property endorsement or obtain a home-based business policy. More important, injuries to visitors (clients, couriers, etc.) during business activities are generally excluded and can expose you to major liability claims—Colorado and Utah both enforce HOA bylaws that may specifically restrict or regulate business activity in residential units.
Given Colorado’s average condo claims now exceed $3,800 and Utah’s run close behind at $3,200 (with higher out-of-pocket risk for uninsured business losses), working with a knowledgeable local advisor is key. Proactive review can help you avoid common gaps—especially as 68% of owners are underinsured for loss assessments, and business assets are almost never included without special coverage.
Making the Right Decision for Colorado and Utah Residents
Question 1: What business activities (and visitors) do you allow inside your condo?
Review your HOA bylaws and master insurance policy. Some associations restrict or even prohibit customer visits, while others require special permission or proof of insurance.
- Check for any HOA restrictions on home-based businesses or client traffic.
- Understand that standard liability only applies to personal (non-business) guests.
Question 2: Have you inventoried your business property and valued it separately from personal belongings?
Many condo owners underestimate the total value of business-specific tools, electronics, and inventory. Make a list and see how it compares to your policy’s sublimits.
- Business property sublimits are often $2,500 or less—far below the cost to replace most equipment.
- For higher value, consider a business property endorsement or in-home business policy tailored to Colorado/Utah risks.
Question 3: How would a client injury or business-related claim be handled under your current policy?
HO6 policies usually exclude business liability—meaning you could personally owe thousands if a customer is injured, even from a minor trip-and-fall. Colorado and Utah courts enforce these exclusions strictly. Ask your advisor about a business liability rider or separate policy, especially if clients ever visit your home.
Trusted by Your Neighbors
Local knowledge, industry-leading protection
4.9/5 Stars
Google Reviews from real customers
97% Retention Rate
Fort Collins families and businesses protected
Independent
We work for you, not insurance companies
Local
Fort Collins owned & operated since 1992
Real World Examples
Sarah's Graphic Design Studio – Old Town, Fort Collins, CO
Background: Sarah runs a graphic design business out of her Old Town condo, equipped with a high-end computer ($3,200), specialty printer ($1,200), and software licenses ($900).
Coverage: Her standard HO6 condo policy included only $2,500 of business property coverage and no business liability.
Monthly Premium: $45/month ($540/year)
The Incident: A power surge during a spring hailstorm damaged her equipment. While her condo policy covered personal property up to $25,000, the business equipment over $2,500 was not reimbursed. Plus, when a client visited for a project discussion, the HOA warned Sarah that uninsured business liability could violate condo association rules.
Total Claim Cost: $4,500 (computer, printer, software)
Sarah's Cost: $2,000 unreimbursed (amount above policy cap)
"I had no idea my business equipment wasn’t fully protected—and that a single client visit could put my whole business and condo at risk. I wish I’d gotten clear advice before starting out."
Mike's Tax Prep Side-Hustle – Highland, Denver, CO
Background: Mike, an accountant, offers seasonal tax prep from his Denver townhome. He stores sensitive client documents and occasionally hosts clients for signature appointments.
Coverage: His policy covered general personal property, but business liability and client data protection were excluded. He spent $39/month ($468/year) on HO6 insurance, but purchased no business endorsement.
The Incident: After a pipe burst, several client files were damaged. Because the loss involved business records, his insurer denied part of the claim. Additionally, a client slipped on a wet entryway; Mike was told this business-related injury wouldn’t be covered under his personal liability.
Total Claim Cost: $3,900 (data restoration and medical costs)
Mike's Cost: $2,300 out-of-pocket (medical/uninsured restoration)
"My regular condo insurance covered my couch but not my client’s medical bills or my work files. I now have a proper business rider—lesson learned!"
Katie's Etsy Jewelry Shop – Sugar House, Salt Lake City, UT
Background: Katie uses her Sugar House condo as the headquarters for her online jewelry business. She keeps $5,000 of finished inventory and hosts occasional client pick-ups.
Coverage: Her Utah HO6 policy included the standard property and liability, but only $2,500 was set aside for business property. Annual cost: $39/month ($468/year).
The Incident: After a regional wildfire, her condo suffered smoke damage, and a box of jewelry inventory was ruined. Without a business endorsement, her claim for lost inventory above $2,500 was denied.
Total Claim Cost: $5,000 (inventory, cleanup)
Katie's Cost: $2,500 unreimbursed (above sublimit)
"I thought homeowner’s insurance would cover everything in my apartment, but no—my business stock wasn’t fully covered. Now I tell every small business owner to ask the hard questions."
Avoid These Common Mistakes
Mistake #1: Assuming Your Personal Condo Policy Covers All Business Equipment
What People Do: Many owners run businesses from home and store valuable tools or inventory, believing their condo insurance fully protects them.
Why It Seems Logical: The policy covers general personal property, so it should include work items too—or so it seems.
The Real Cost: Standard HO6 policies cap business property at $2,500. In Northern Colorado, average business losses for home-based operators exceed $5,400. Owners often pay $2,000–$4,000 out-of-pocket after common events like power surges, water leaks, or theft.
Smart Alternative: Work with FoCoIns to add a business property endorsement or line up a true home business policy that accounts for equipment, inventory, and local risks.
Mistake #2: Overlooking Business Liability for Client Visitors
What People Do: Some residents host clients, patients, or delivery vendors in their condo or townhome, assuming their liability coverage is enough.
Why It Seems Logical: The policy includes personal liability, which feels broad enough for most accidents.
The Real Cost: Most personal liability coverage excludes claims related to business activity. In Colorado and Utah, a single trip-and-fall injury could leave you responsible for $7,000–$45,000 in medical or legal costs without proper business liability coverage.
Smart Alternative: Ask a FoCoIns advisor to review your use case and recommend either business liability endorsements or a low-cost in-home business policy. You’ll protect both your assets and your business reputation.
Mistake #3: Ignoring HOA Restrictions and Master Policy Requirements
What People Do: Owners start a business without checking if the HOA or condo association needs to approve certain activities—or if their insurance meets HOA requirements.
Why It Seems Logical: It’s easy to assume home businesses fly under the radar or that the association protects everything inside the building.
The Real Cost: Violating HOA rules can lead to fines, forced closure of the business, or even denial of condo claims tied to unauthorized use. In some cases, the HOA's master policy won’t respond to damages caused by excluded business operations, making you responsible for $5,000–$20,000+ in repairs or legal costs.
Smart Alternative: Review your HOA’s policies or consult with FoCoIns before launching or expanding your home business. Ensure your insurance and business activities align with all community regulations—protecting both your livelihood and your home investment.
FAQs On The Same Topic
Find answers to your most pressing insurance questions right here.